(S&P Global Platts, 24.Apr.2019) — Venezuela’s state-owned PDVSA is set to export 955,000 b/d of crude in April, up from 843,000 b/d in March, when several blackouts crippled export infrastructure, according to the company’s monthly export plan.
Asian refiners are taking 786,000 b/d, or 82% of April’s shipments, up from 632,000 b/d or 75% of March’s volumes, with greater placement of Merey 16 heavy crude blend from the Orinoco Belt diluted with light crude, PDVSA said.
PDVSA did not find buyers for about 193,000 b/d of the 1.15 million b/d it offered for export in April, compared with available March exports of 1.17 million b/d.
Most of the April shipments represent repayment of loans to China and Russia, including shipments to India’s Reliance Industries. PDVSA has trilateral deals with the China National Petroleum Corp. and Russia’s Rosneft where it sells the crude to a third party, which then pays CNPC or Rosneft.
As a result, Reliance might be the final buyer of most of the 220,000 b/d of Merey 16 crude committed to Rosneft for April, although those details were not provide in the document.
The flow of Venezuelan crude to India has not fallen sharply despite pressure from the US Department of State to reduce its dependence on the sanctions-hit oil exporter.
India’s petroleum secretary told US officials in March the government was stressing to private Indian refiners the risks of importing Venezuelan crude amid US sanctions against PDVSA.
Reliance, which operates two mega-refineries at the Jamnagar complex on India’s west coast, has said it would reduce its Venezuelan crude imports in compliance with US sanctions. Reliance also halted sales of diluent like naphtha to Venezuela. PDVSA depends on imported naphtha to dilute its heavy crude grades.
However, Indian refiner Nayara Energy’s largest shareholder is Rosneft, and Russia has committed to helping the regime of President Nicolas Maduro withstand US sanctions.
STEADY FLOWS TO INDIA
Six VLCCs are set to deliver Venezuelan crude from Jose Terminal to India’s Vadinar port in April, according to S&P Global Platts trade flow software, cFlow. The April deliveries represent about 375,000 b/d.
March deliveries spiked to 512,000 b/d, with eight VLCCs making the Caracas-to-Vadinar route, according to cFlow.
So far, three VLCCs are set to make deliveries in May, carrying the equivalent of 180,000 b/d, cFlow data show.
US pressure on India to curb its Venezuelan imports comes at the same time Washington plans to revoke India’s waiver to import Iranian oil.
Indian industry and government sources said this week the country has other options. State-run refiners will aim to step up imports from countries such as Mexico and Iraq, while private refiners Reliance and Nayara Energy were not receiving much Iranian crude during the six-month sanctions waiver period.
“We have Plan B already in place. In fact, we have Plan C and Plan D also in place to meet any eventuality,” an Indian government official said.